Citigroup To Refile Capital Plans After Failing Fed Stress Tests

Citigroup will refile its capital plans under Federal Reserve black-sky scenarios this Monday, after failing the capital stress tests earlier this year.Click here for updates >

In its announcement, Citi said it would refrain from distributing capital to shareholders, and will wait until its next filing in January 2013 before making the request with the Federal Reserve again.

“We will make decisions regarding the 2013 capital plan later this year,” the Manhattan-based firm said. “In the meantime, we will continue to build additional capital through earnings and the ongoing reduction of non-core assets.”

In March, when the Federal Reserve released results of its Comprehensive Capital Analysis and Review, 15 banks and bank holding companies passed with perfect scores.

In March, the Federal Reserve released the results of its hypothetical severe stress test scenario as part of the 2012 CCAR. The results showed that Citi comfortably exceeded the stress test requirements without Citi’s proposed capital actions. However, while the Federal Reserve did not object to Citi conducting certain capital actions, such as the redemption of trust preferred securities as described below, and to continue its current dividend, it did not approve Citi’s request to return additional capital to its shareholders.

The Federal Reserve will re-evaluate Citi’s submission and is expected to act on it later in the year.

Shares in Citi are flat in after hours trading after rallying 3 per cent during the day.

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